Questioning AI · What factors behind the ten-year IPO marathon influence the listing process?

Produced by | Bullet Finance

Author | Xing Li

Editor | Egg Boss

Design | Qian Qian

Review | Song Wen

A new round of capital infusion for city commercial banks is accelerating.

Recently, local city commercial banks have frequently taken actions to supplement capital, aiming to ease capital pressure and enhance risk resistance. Many institutions are solidifying their operational foundation through capital increases and share expansions.

Hubei Bank Co., Ltd. (hereinafter: Hubei Bank), the only provincial-level state-controlled city commercial bank in Hubei Province, is among them.

Recently, Hubei Bank disclosed a targeted issuance report, announcing the completion of an 1.8 billion share issuance, raising a total of 7.61B yuan, marking one of the largest capital replenishments since the beginning of 2026.

In recent years, Hubei Bank’s asset size has entered a rapid growth phase, with asset growth maintaining double-digit increases for consecutive years.

By 2025, the new chairman of Hubei Bank, Zhao Hongbing, proposed the strategic goal of “assets exceeding one trillion yuan by 2027.” However, as of the end of 2025, the bank’s total assets were approximately 621.46B yuan, having surpassed a new trillion-yuan milestone for two consecutive years, but still some distance from the trillion-yuan target.

Regarding the listing process, as the largest city commercial bank in Hubei Province, Hubei Bank has been preparing for an IPO for 10 years, with a three-year submission history. Its review status has remained “Accepted” throughout.

Whether Hubei Bank can successfully achieve the “trillion-yuan asset scale” goal and smoothly list on the A-share market will be a major industry focus.

1. Behind the 7.6 billion yuan capital increase, pressure on capital adequacy ratio

Hubei Bank’s origins trace back to the Hubei Provincial Bank established in 1928. In early 2010, the Hubei Provincial Party Committee and Provincial Government decided to reorganize five city commercial banks—Yichang, Xiangyang, Jingzhou, Huangshi, and Xiaogan—by establishing a new Hubei Bank through mergers.

Since its founding, Hubei Bank has undergone multiple capital increases.

In 2018, it increased registered capital by 1.34B yuan through capital infusion. In 2019, it added 974 million yuan, bringing total share capital to 6.85 billion yuan. In June 2021, the Hubei Provincial Finance Department injected capital, raising share capital to 7.61B yuan.

On February 10, Hubei Bank’s official website published the targeted issuance report, showing the completion of an 1.8 billion share private placement, raising 7.61B yuan, with registered capital increasing to 9.41B yuan, nearly a 24% rise.

This capital increase heavily relies on state-owned assets backing, with over 96% of new shareholders being legal persons owned by the state, pushing the state shareholding ratio above 84%.

Among the 53 corporate shareholders in this issuance, besides 18 existing shareholders, 35 new state-owned legal persons participated.

Apart from Hubei Yulong Water Resources and Hydropower Engineering Co., Ltd., which is a provincial state-owned enterprise, the others are from 15 cities and prefectures within Hubei Province. Six companies from Jingzhou, five from Huanggang, three each from Wuhan, Huangshi, and Xianning, and other cities such as Jingmen, Xiangyang, Ezhou, Enshi, Xiantao, Xiaogan, Yichang, Tianmen, Qianjiang, and Shiyan also invested.

These enterprises contributed a total of 5.18 billion yuan, accounting for 68% of the total subscription amount.

In terms of subscription amounts, Hubei Jingjiang Industrial Investment Group subscribed 495 million yuan for 117 million shares, becoming the largest new shareholder by subscription amount; Wuhan Wuchang State-Owned Capital Holding Investment Operation Group invested 423 million yuan for 100 million shares; Xiantao Urban Development Investment Group contributed 212 million yuan for 50 million shares.

Hubei Yulong Water Resources and Hydropower Engineering Co., Ltd. invested 612 million yuan to subscribe for 145 million shares, directly entering the top ten shareholders. The largest shareholder, Hubei Hongtai Group, invested 1.52B yuan, maintaining a 19.99% stake.

The primary motivation for this capital increase was capital pressure. Data shows that Hubei Bank’s capital adequacy ratio has been under continuous pressure in recent years.

At the end of Q3 2025, the bank’s core Tier 1 capital adequacy ratio once dropped to 7.74%, approaching the regulatory red line of 7.5%, facing certain regulatory compliance pressure.

Hubei Bank’s targeted issuance report indicates that the entire 7.61B yuan raised will be used to replenish the bank’s core Tier 1 capital, improve the capital adequacy ratio, and strengthen capital strength and risk resistance.

After fully including the new funds into core Tier 1 capital, this ratio significantly increased to 8.96%.

However, according to the State Administration of Financial Supervision and Administration, as of the end of Q4 2025, the core Tier 1 capital adequacy ratio of Chinese commercial banks was 10.92%. Based on this standard, Hubei Bank’s capital adequacy ratio remains under pressure.

2. Total asset expansion, rising non-performing loans, new leadership aiming for trillion yuan

Behind the long-term capital pressure of Hubei Bank is its rapid asset expansion.

By the end of 2025, Hubei Bank’s total assets reached 621.46B yuan, an 18.8% year-on-year increase. Wind data shows that since 2020, Hubei Bank’s total assets have maintained double-digit growth.

From 2020 to 2024, the bank’s total assets were 303.34B, 351.12 billion, 403.55B, 460.85B, and 523.11B yuan, respectively, with year-on-year growth rates of 15%, 14.9%, 14.93%, 14.2%, and 13.51%.

However, the bank’s performance has lagged behind its asset growth.

Wind data indicates that Hubei Bank’s operating income in 2020 and 2021 was 7.92B and 7.67B yuan, respectively, with declines of 1.71% and 1.19%.

In 2022, there was a rebound, with operating income reaching 8.94B yuan, up 16.47%. In 2023 and 2024, growth slowed, with revenues of 9.72B and 10.16B yuan, up 8.77% and 4.53%.

Net profit figures from 2020 to 2024 were 1.32B, 1.76B, 2.16B, 2.47B, and 2.66B yuan, with respective growth rates of -34.55%, 17.25%, 22.74%, 14.48%, and 7.72%.

From the revenue composition, Hubei Bank’s income is highly dependent on interest income.

In 2023 and 2024, net interest income was 7.69B and 7.5B yuan, accounting for 79.14% and 73.83% of total revenue.

However, in recent years, market interest rates have been steadily declining, compressing net interest margins. From 2022 to 2024, Hubei Bank’s net interest margin declined from 2.24%, to 1.76%, then to 1.60%.

In terms of asset quality, the non-performing loan (NPL) ratio has continued to improve, but the NPL balance has been rising.

Wind data shows that the NPL ratios for 2020 to Q3 2025 were 2.25%, 1.97%, 1.96%, 1.95%, and 1.85%.

The NPL balance has increased over recent years, reaching 4.07B, 4.29B, 5.12B, 5.96B, and 6.5B yuan in 2021 through Q3 2025.

Joint Credit Rating reports note that since 2024, thanks to optimized risk management and increased asset disposals, Hubei Bank’s NPL ratio has slightly declined. However, loans to the real estate and construction sectors constitute a relatively high proportion, and the sluggish real estate market has led to risks such as industry cash flow disruptions and related sector defaults.

By the end of 2024, NPL ratios for real estate and construction loans were 2.76% and 2.59%, respectively, down from 2023 but still higher than overall loan NPL ratios, indicating ongoing risks in the real estate sector.

Beyond performance changes, 2025 also saw major personnel changes at Hubei Bank’s top management.

In April 2025, Zhao Hongbing was appointed Chairman of Hubei Bank. His background shows he was born in 1968, holds a master’s degree, and previously worked long-term at the Hubei Provincial Finance Department. In 2024, he was appointed Chairman of Yangtze River Property & Casualty Insurance.

After taking office, Zhao Hongbing announced the strategic goal of “assets exceeding one trillion yuan by 2027.”

In May 2025, Zhao visited Yangtze River Industry Group. During the meeting, he stated that the bank aims to promote capital increases, build a national bank, and hopes that Yangtze River Industry Group will continue to support and deepen cooperation in major project financing, helping the bank realize its “assets exceeding one trillion yuan by 2027” goal.

However, with assets at 621.46B yuan at the end of 2025, to reach the trillion-yuan mark by 2027, the bank would need to maintain an average annual growth rate of over 20% in the next two years.

How will Hubei Bank achieve this through specific business strategies, and how will it balance growth with risk control? As of press time, Bullet Finance has reached out to Hubei Bank for comment but has not received a response.

3. A decade-long IPO pursuit, a long road to listing

Currently, in Hubei’s financial landscape, no bank is publicly listed, and Hubei Bank, with total assets exceeding 600 billion yuan, carries this expectation.

According to public information, Hubei Bank began preparing for an IPO as early as 2015, officially initiating the process in 2020.

In April 2021, Hubei Bank signed a guidance agreement with CITIC Securities and formally submitted the guidance filing to the CSRC. The application was accepted on April 19.

In November 2022, Hubei Bank submitted its listing application to the Shanghai Stock Exchange, officially opening the listing process. With the implementation of the registration-based IPO system in 2023, Hubei Bank switched to registration review. The Shanghai Stock Exchange accepted its application in March 2023.

Now, after three years, Hubei Bank’s IPO remains without substantial progress, with the review status still “Accepted,” unable to proceed to inquiry or listing meetings.

(Figure / Eastmoney)

Behind the IPO delay, several senior executives have been investigated for loan approval violations, exposing governance issues.

As early as November 2022, Hubei Bank’s first chairman, Chen Dalin, was expelled from the Party for serious violations. The notice stated that during his tenure, Chen Dalin used his position to benefit others in loan approvals and project contracting, illegally accepting large sums of money, with particularly large amounts involved.

In 2023, former President Duan Yindi was also investigated and expelled for serious violations. Earlier, in 2020, Vice President Wen Yaoqing was subject to disciplinary review and supervision, and in 2021, was also expelled.

Hubei Bank’s annual report shows that from 2011 to 2017, Chen Dalin and Duan Yindi served as Chairman and President, respectively, while Wen Yaoqing was the long-term First Vice President, forming a long-standing leadership team.

Additionally, shareholding freezes have impacted the bank’s stability.

According to the prospectus, as of July 2022, 15 shareholders had pledged shares, totaling 554 million shares, representing 7.28% of total share capital; another 10 shareholders had frozen shares totaling 107 million, or 1.41%.

Among these, Sander Group Co., Ltd. (hereinafter “Sander Group”) had the most significant frozen shares, totaling 59.9933 million.

In April 2024, Sander Group’s 59.9933 million shares were auctioned publicly by Tianjin Third Intermediate Court. The assessed value was 205 million yuan, with an initial bid of 144 million yuan, but the auction failed due to no bidders.

(Figure / Shetu.com, based on VRF protocol)

Joint Credit Rating reports indicate that, as of the end of 2024, Hubei Bank had 12 shareholders with external pledges, accounting for 3.07% of total shares, with relatively small pledge ratios. Shares involved in judicial freezes totaled 588.35B, representing 0.57% of total share capital.

Furthermore, Hubei Bank faces competition from Hankou Bank in the local financial market.

Compared to Hubei Bank, Hankou Bank was established earlier. Founded in 1997 from the restructuring of 63 urban credit cooperatives in Wuhan, as of Q3 2025, Hankou Bank’s total assets reached 4.59B yuan, surpassing Hubei Bank.

In terms of IPO progress, Hankou Bank signed an IPO guidance agreement with Haitong Securities as early as 2010 and remains in the guidance phase. In 2025, Hankou Bank also completed a 4.586 billion yuan capital increase, bringing in 11 local state-owned enterprises as shareholders.

Overall, the 7.6 billion yuan capital increase has temporarily alleviated Hubei Bank’s capital compliance pressure, and the dense state-owned shareholding reflects local support for its development. But the bank still faces challenges such as capital adequacy ratio pressure and rising non-performing assets.

Will Hubei Bank realize its goal of “trillion yuan assets” and successfully list on the A-share market soon? Bullet Finance will continue to monitor.

Image source: Jiemian News Image Library.